Beware: There are new CAJA rates for residents in Costa Rica. This is big news for people who have already been granted residency in the country and for those who are planning to do it.

We recommend you read through this article before worrying about an increase in social security fees that may not apply to you — or if you are wondering if you’ll have to pay higher rates if you apply for a residency now.

In case you don’t know yet, CAJA is the Costa Rican Social Security Fund, whose official acronym is CCSS but is commonly referred to as “la Caja” (meaning “fund”) by ticos.

Lately, you may have heard about an increase in the CAJA rates that more than doubles social security contributions for residents living in Costa Rica. This is partly true, since those residents who were registered in the CAJA before March 16, 2022, should not worry. The regulation changes don’t apply to them and their rates should not double.

The new CAJA rates are for residents who apply as retired people or investors from March 2022 onwards. Find out how this may also apply to the rentistas residency category below.

In case a retired or investor resident is charged with the new rates, Outlier Legal Services can provide assistance. As we will see shortly, the changes made regarding universal healthcare rates consist primarily in the establishment of the obligatory nature of a contribution that was previously voluntary for foreigners.

Let’s get into the details.

When did the CAJA rates increase for residents?

On September 16, 2021, Costa Rica’s official gazette published a reform on the Regulation of Voluntary Insurance and Migrants Insurance.

The new regulations have the novelty of adding a whole chapter dedicated to the insurance of immigrants with residency, and for the first time making a contribution mandatory for them.

The Costa Rican social security has two main contributions: SEM and IVM. SEM stands for health and maternity insurance in Spanish, and IVM for disability, old age and death (ergo, retirement).

Up until now, retired (“pensionados” in Spanish) and investor residents were usually only charged with the SEM contribution. (Rentistas too, but they are not explicitly mentioned in this reform.)

Before, the regulation specified that the IVM contribution was voluntary for residents. Now, the reform has created a special chapter for immigrants in the regulation that clearly states that they are required to have both the SEM and the IVM insurance. This went into effect on March 16, 2022, six months after the publication of the reform.

There were instances before this reform where retired or investor residents were charged the IVM contribution. However, in our experience as an immigration legal firm, those rates could have been exonerated through appeals.

Currently, it is unclear if that would be the scenario going forward, as only the outcome of future appeals will tell.

What are the new rates for immigrants?

Retired and investor residents who signed up to the CAJA after March 16, 2022, will now be charged both the SEM and the IVM social contributions, which change year after year and vary depending on their reported income.

For 2022, the following are the rates that apply to those residents. Income brackets are in Costa Rican colones (₡).

CAJA: SEM (health and maternity insurance) 2022 rates

CAJA: IVM (disability, old age, and death) 2022 rates

Are the rates double now?

Let’s say you report a $3,000 monthly income as a retired or investor resident in Costa Rica. The current exchange rate for that is almost 2 million colones (₡1,974,270, to be precise). That would put you in category number 5 of both the SEM and the IVM contributions, meaning your income level bracket pays a higher rate than the others.

If you signed up to the CAJA before March 16, 2022, your social contributions would be 10.69% of your reported income, solely for the SEM insurance. That’s ₡211,050 (around $320). However, if you registered to the CAJA after March 16, 2022, you would also need to add ₡159,719 (around $243) for the 8.09% IVM insurance rate.

So… before the regulatory reform that is now in force, a $3,000 monthly income would mean only a 10.69% social security contribution. But now, and only for residents signed up from March 16, 2022, the rate has almost doubled to 18.78%. This means that a resident with a $3,000 income has to pay ₡370,768 (around $563) — that’s 76% more.

Insured residents under previous regulations will continue under the conditions given at the time of their affiliation. The CCSS has stated that their condition will not change unless their insurance changes or they are excluded and decide to register again. This is because of the constitutional principle of non-retroactivity.

What about the CAJA rates for rentistas?

The regulation doesn’t mention the rentista residency when it comes to the CAJA rates for immigrants. The text talks only about retired or investor residents.

However, we cannot absolutely guarantee that rentistas won’t get charged, since sometimes there’s a big gap between what the law says and what officials understand or do.

Our immigration legal team has its eyes put on this and is waiting for any anomaly to start acting. Since the regulation only recently came into effect, the only way we have to fight against apparent unfair charges is to appeal them once they happen.

If you are a rentista resident and have further questions, please reach out to us.

Is this temporary or permanent?

This reform suppresses all past regulations concerning insurance for immigrants in Costa Rica. It came into effect six months after its publication in the official gazette, and only a new reform can dilute the effect of these changes.

The way of appeal could bring hope for new residents, but only after complaints are filed through official channels.

Outlier Legal has historically helped foreigners in their process of becoming residents and will continue to do so. We are studying the effects this reform is having on immigrants as well as the drafting of the new regulation to appeal in a well-founded way.

We are also vigilant of abuses against residents who signed up previously.